"The leadership of Russia has officially confirmed the fact that the nest of terrorism has been crushed, that illegal armed groups have been neutralised, and militant leaders on whose conscience lay the grief and suffering of thousands of people have been destroyed, detained and brought to court."

"Now the Chechen Republic... is a peaceful, developing territory, and cancelling the counter-terrorism operation will only promote economic growth in the republic," he added, declaring that in future 16 April would be a public holiday.

Sporadic clashes persist in Chechnya, however, and violence continues in the neighbouring regions of Dagestan and Ingushetia.

In a statement on Thursday, Russia's National Anti-terrorist Committee said it had "cancelled the decree imposing an anti-terror operation on the territory of Chechnya, effective from midnight [2000 GMT on Wednesday]".

"This decision aims to create conditions to further normalise the situation in the region, to restore and develop its economic and social infrastructure," it said.

CHECHNYA KEY DATES

1991 USSR collapses, Chechen separatists declare independence

1994 Russia sends forces to crush independence movement

1996 Ceasefire called

1999 After explosions in Russia, Moscow sends troops back

2003 New constitution gives Chechnya more autonomy; Akhmad Kadyrov elected president

The BBC's Richard Galpin in Moscow says the announcement is a moment of great symbolism - the official end of a conflict which first erupted in 1994, and which has claimed more than 100,000 lives and left Chechnya in ruins.

But, our correspondent says, Wednesday's decision reflects a reality on the ground which was established several years ago.

The separatist rebels have long been pushed to the margins, and have been unable to carry out any serious attacks for the past five years - not least due to the brutal tactics used by President Kadyrov, he adds.

And while the insurgents have been confined to the mountains, the capital Grozny is now being rapidly rebuilt, our correspondent says. A huge, new mosque, named after Mr Kadyrov's late father, opened last autumn.

Russian President Dmitry Medvedev ordered the end of the counter-terrorism operation after announcing last month that he believed the region was now stable enough to ease security restrictions.

These include curfews, road blocks, periodic searches by the security forces for suspected Islamist fighters, and relaxed detention rules.

"We must create new possibilities for investment and employment," Mr Medvedev said in a broadcast on state television in March.

Chechnya will now be able to establish its own international airport and customs zone, which the authorities hope will encourage more trade. It should also be much easier for Russians and foreigners to move in and out of the area.

However, our correspondent says it is not clear how many of the thousands of Russian troops will still remain in Chechnya.

Security sources have told the BBC that an entire army division of around 20,000 soldiers will continue to be based there. The Russian interior ministry is meanwhile planning to withdraw 5,000 of its troops.

War-ravaged republic

Chechnya declared independence from Russia in 1991.

Three years later the Kremlin sent in troops to restore its authority, sparking the first Chechen war, which ended in humiliating defeat for Russian forces in 1996.

Ramzan Kadyrov rose to power after the death of his father, Akhmad

In 1999, Prime Minister Vladimir Putin sent Russian troops back in, launching the "counter-terrorism operation" that has now been ended after 10 years.

The Kremlin pounded the rebels and gradually managed to persuade several powerful clan leaders to defect.

They included Akhmad Kadyrov, a senior Chechen religious leader, who later was elected president and declared his loyalty to Moscow.

He was killed in a bomb blast in October 2003, but was eventually followed by his son, Ramzan.

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